Want a stronger business climate? Think efficiency and renewables

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It’s becoming common knowledge that energy-efficiency investments often pay for themselves within a few years and give businesses long-term energy cost savings. Add in the productivity gains and reduced maintenance costs that often accompany efficiency upgrades, and the business case is hard to ignore.

But take a broader view of the economic benefits, and there are even more compelling reasons for efficiency investments. The first one is the impact on what we pay for power. Every kilowatt-hour of electricity that we don’t consume in our region is a kilowatt-hour that utilities don’t have to generate. Why is that important? Because it costs a lot less to conserve energy than it does to produce and distribute it.

In Oregon, where Energy Trust of Oregon delivers energy-efficiency and renewable energy programs to customers of Portland General Electric, Pacific Power, NW Natural and Cascade Natural Gas, every kilowatt-hour we saved in 2009 cost just over two cents and every therm cost 45 cents. Without efficiency programs, it would cost more than four times more to deliver the same kilowatt-hour and about one and a half times more to deliver the same therm. It’s clear where we should look to meet a portion of our future energy needs. Efficiency is a bargain.

That’s why our state’s least-cost power planning approach prioritizes conservation, efficiency and renewable energy resources first before we invest in other, more expensive energy resources. The strategy has served us well. According to the Northwest Power Planning Council, energy efficiency has successfully met approximately 50 percent of the regional growth in electricity demand from 1978 to 2008. In that time, the region has saved 3,900 average megawatts — enough to power over 3 million homes.

Over the next 20 years, the Power Council expects regional electricity load to grow by about 7,000 average megawatts — almost twice what the region met through energy efficiency in the last 30 years. We have our work cut out for us, but there’s great potential. In the Northwest, efficiency programs expect to meet 85 percent of this predicted load growth.

Without those programs, it would cost three times more to provide and deliver the needed electricity and 1.5 times more to acquire needed natural gas. Investing in efficiency makes sense because it helps us meet future power needs at the least possible cost. But it also makes sense because, like energy generated from renewable sources, it is a resource that doesn’t contribute to climate change or carry the liability of future carbon costs.

Renewables are the other part of the clean, low-cost energy equation. In Oregon, state policy requires the state’s three largest utilities to acquire 25 percent of their electricity from renewable resources by 2025. This translates into 1,500 average megawatts of new renewable energy­­ to be developed in Oregon — enough to supply the needs of 1.25 million average homes.

Besides providing environmental benefits, renewable energy has become our least-cost, lowest-risk resource. When we invest in renewable energy, we also get perpetual, free fuel. And that means we mitigate volatility associated with fuel costs, neutralize any costs anticipated for carbon, and help reduce and stabilize rate impacts as we grow to meet future energy demand.

Investments in efficiency and renewable generation contribute another critical economic benefit: jobs. In fact, at a time when so many companies are shedding workers, the clean energy industry is growing and growing strong. The Power Council estimates that our region will create 47,000 new jobs by following the energy efficiency path outlined in their recently introduced power plan. In Oregon alone, we estimate that Energy Trust programs have created more than 2,300 jobs, generated $76 million in wages and $11 million in new business income over the last seven years.

Clean Edge, a growing Portland-based company that tracks investment in clean energy, predicts dramatic growth in worldwide renewable energy markets between now and 2019. Combined, the company forecasts that biofuels, wind and solar electric markets will grow to nearly $326 billion in the next decade. And in the here and now, approximately $100 billion of the $787 billion federal stimulus package in the U.S. is targeted for clean-tech investments and activities.

Investing in energy efficiency and renewables is a sound, cost-saving strategy for Oregon businesses, and it is at the core of our future energy supply strategy. But beyond that, it is a key element in our region’s well being, one that offers tremendous opportunities for job creation, business development and clean, green economic growth.

Margie Harris is the executive director of Energy Trust of Oregon.